a check-up on housing...from construction to sales...why there are small signs real estate's freefall could be stabilizing plus, it's not just healthcare on congress' action list this fall. key tax issues that will impact housing, car sales...even death...are on the table. and...what the united states can learn from a couple foreign countries when it comes to turning around the troubled economy...plus viewer mail...it's all ahead on this edition of first business. welcome aboard everybody glad you are along for the ride. preteens any kind of economic stability is going to be built upon it the return of the u.s. consumer any way shape or form the job market is down and housing has got to stabilize. it is a very critical time for home buyers especially if one of the bend of the $8,000 a tax

credit would you have to do is find a home negotiated price wheat your loan approved and close all before november 30th and if he can do that within four months i consider that a miracle. it is a busy week this week for housing key indication do on the real-estate market homebuilder's index on monday starts and permits and new housing market look on wednesday and by the end of the week existing home sales and a lot rests on finding some kind of green shoots in the housing market. the state of housing in america has been showing some small signs of stabilization ahead of this week's reports on home contruction and sales. while activity remains a fraction of what it was at the height of the boom 2 or 3 years ago, this summer has seen some indication of a pick-up. start with new construction. in the summer of 2005, new home starts were running at an annual clip of more than two million. just two years later, though, in 2007, new home construction had

been cut by a third... and this summer, it's a quarter of what it was four years ago. however, the pace of building has picked up this spring and summer, rising three months in a row. the sales of those new homes also has picked up over the past few months rising two percent from april to may...and almost 11 percent from may to june. but the bigger picture shows just how far new home sales have fallen, down by two- thirds since the boomtimes in 2005. we may be seeing a few more new home buyers, in part, thanks to lower prices because while sales of new homes has picked up month over month this summer, prices continue dropping. in june, the median price of a new home was $206-thousand dollars. that's a figure not seen since the winter of 2003. new home prices are at five year lows even as mortgage rates and tax incentives for new home buyers have helped bring some buyers off the sidelines. 90 percent of

the housing market are existing homes. an update on that part of the market is due friday and the story is similar. sales are up four months in a row, but remain 31 percent below 2005 levels. unlike new home prices, the prices of existing homes have been pointed higher this spring and summer, rising 9 percent since april alone. but, again, down 17 percent since the heydays of 2005. in september, when congress comes back from its break health care reform will likely take center stage but there are some important tax issues that need to be dealt before the end of this year. and the looming federal budget deficit will be a big factor in deciding whether to make certain changes to the existing tax code. perhaps the largest tax issue in front of congress this year... is what to do with the estate tax in 2010 .. according to the bush tax cuts - you won't have to pay estate taxes for the entire year... that means if you die in 2010, it doesn't matter how big your

estate is it could be 100 million and there's no estate tax in 2010. michael calahan.. with blackman kallick says congress could decide to take a closer look at that... and maybe extend this year's tax rates into next year.. but they only have 4 months left to take action. if they fail to act.. you may have a lifetime opportunity.. in 2010 - but i don't want to take advantage of that myself. other once in a lifetime opportunities are also ending this year... including the 8-thousand dollar home buyer tax credit if you buy a home in 2009 you have until november 30th to complete the purchase of that home.. tax professionals continue to get lots of questions about who qualifies. there are questions for example, if my husband owned a home before we were married.. and i've never.. and now we're buying our next home.. do i qualify.. and the answer is if you are married... that precludes you.

and remember to take advantage of the sales tax deduction on new car purchases under $49,500...if you bought your car between february 17th and december 31st 2009 - it applies to new cars, light trucks, motorcycles and motor homes... many people could see a signigicant savings from that sales tax deduction. "a deduction is a reduction of income.. and it benefits to the tune of your tax rate.. so if you are in the 25% tax bracket you would save 25 cents per 1 dollar of a deduction" the sales tax deduction on new cars is in addition to any government rebate you would get under the cash for clunkers program... you can claim the sales tax break when you file 2009 taxes and you don't have to itemize in order to take that deduction. both the new car sales tax break plus the homebuyer tax credit are phased out for higher income earners.

as we mentioned earlier a lot of housing data due in the week ahead peter along with us over at the cme group certainly that's going to be catching him lines in the days ahead still holding to the gains that we have seen recent march in the july gains with the make of the market over all? there has been a few big things that happened since march relaxed a fast the roles are in the bank's bailout but accounting rules to change which has helped drop interest rates a bit of these teams have helped put a bit into the stock market. you had earnings come better than expected so we have a lot of very scary scenarios actually not come to pass and the market has rallied as a response. do you think as and be close to a thousand is fairly about you? i'm want to say the market is always correctly priced. i do think going thwart the the pain that exist in the economy has not in

any way dissipated and i think as we get into the fall and we start to get growth numbers would better transit to that we will reprise equities in little bit low. i think in the very little too high. will pull for the oppressed based upon what you expect to be corporate profits with the rest of the year. yes exactly. i think earnings are going to be very difficult to come by in very difficult to hold onto the next few quarters. comparisons easier though peter. yes they do. peter along with us at the cme group. thank you. into town. still to come from jumbo mortgages to consumer blame...we're tackling viewer

mail later on in the show but first why the united states may need to take notes from germany and france when it comes to turning around this troubled economy.

the first two major economies to get back into positive territory are germany and france. both actually saw their economies growing in the second quarter while most of the rest of the world, including the u-s continued to see shrinking economies. dan cook is senior markets analyst at i-g markets. nice to see welcome back. good to be here. when determining friend doing right that the rest of the world is an? there's been less plans were because of the sized one thing they had a cash for clunkers program which is successful to help the overall economy. in germany particularly the way they handle their unemployment it but we have here they subsidize factories and companies to keep their workers on short-time bell

will make up the difference ecologically-as a huge impact on the consumer the big question remains i've seen the headlines the first one is out of recession but not by any means because the stability of the big question let's take a look at the signs of a rebound in germany and france were in produced which is to increase but the unemployed rate still elevated not quite as high as the united states to mention the still its plants by comparison to you as a mere pittance but are they spending those dollars more wisely than americans are? in the case of germany have on the consumer is ecological standpoint because they still have a job even if there for a month so the employees the hundred thousand people and for low and one of the off 20,000 become back to work in a month in x 20,000 aloft psychologically the consumer is going to spend. so from this side it's been a better movie than we've had

probably wouldn't work in the united states with the legal issues before them it works fine. you mean sustainability. and you're looking at the third and fourth quarter and booking of produce to the economies would mean for the rest of europe as well as u.s. companies that sell and the group who think this will be a positive sign would it not? was a positive sign. it was great to see a number that didn't have a negative in front of it no matter how small the no. maybe. part of it is with germany subsidies to was extended to 18 months from six monster come from a lot of companies and is estimated about 6500 employees can be affected. that can have a devastating impact on the overall gdp. it is a bright side perhaps this growth that will start to use private money as well. to start to get bank revolving again with will be good because we're so interconnected. the question here whether or not an idea of some of the stem less money its seed money to stimulate new growth in the private industry to take over. any signs of that happening in the european companies? there are some signs. gdp was one of the continue to

grow their private equity will build a big parade look good to have been dealt a a lot of that european companies with export base. and we see these companies, we always expect the u.s. to lead out to me it doesn't break my heart and other competitive but if your star to turn around as long to help the u.k. does want to help us if we are so in a packet that any global brokers can't be good for everybody. the spaniard in front of the screens watching international markets stocks to currencies what does this mean for you as their best this house should be approached the rest of the year? one of the thing that still a major concern for me is that i think this is already priced into the market months ago me seen just a massive rally since march and wonders if it were real. the labor market is a globally the biggest concern i have. have the answer that question put to market its this rally we've seen from 66 over a thousand is for real? i can't argue it can go along with emily did happen to

support israel and the sustainability of the bill until we get the u.s. consumer and talk about emerging markets to u.s. consumer mental 10 trillion dollars does double the total gdp of both germany and france until the u.s. consumer tip get back in a game that doesn't look to be happening. all this notwithstanding diva get germany and france different from you as per spec of? possibly. can't be difficult because they had the center of the they're still one have the same pressures. i would like to be too long too much right now in the equity market its fourth store. we appreciate thank you for the insights. see a market analyst at idea markets. online items from higher interest rates.. to a lot more fees across the board... some of the changes you'll be seeing as a result of credit card reform..that story is on our website plus, learn how technology is factoring into healthcare...the impact it could have on costs and quality of life....you can catch these stories and more on website...firstbusinessx.com. show... viewers tell us to stop blaming the consumer for the collapse...it's ahead in viewer mail.

to always plenty of ways to communicate with those we want to hear your story is your critiques or criticism as the case may be comments at first business stock, (312) 660-8397 the voice mail has impact lately that it back to win one coming in from if you were asking about help for jumbo mortgages. hi my name is carolyn caller from washington d.c. i want to know when is president obama going to come up with a package would people with double mortgages who owe more than the property is worth. but not for the rest of us. this is a very significant issue especially for people who live and expensive housing markets like california

where you can't really find a home from less than half a million dollars but very difficult to work with the jumbo market here because dumb blondes the secondary market for both is certainly tried up because think someone to take the risk. take a look at the interest rates as you see between conforming loans which is basically a 30 year fixed rate mortgage for $470,000 or less below 5 1/2% in this is where the secondary market has become to be applied again. jumbo rates anything of both you still see a significant increase in a significant price for risking their over 6% at this point. the caller's point is she is even on the water with a double and that's more difficult to twist and certainly no official program yet has been launched the best is to engage her lender in a conversation and try to negotiate directly. and i would add in helps locate your own community housing counselor if there's so many housing counselor across the united states neighborhood housing services of chicago for one if they always work when people

out there so it's best to locate one of your housing counselor and maybe they can help. the keep to yourself you want to engage these professionals and a conversation and began some negotiation. toss a voicemail about housing. i'm sick of you planning consumer for the this blaming the consumer training people for taking all loans is ridiculous. six percent of mortgages are going to stop blaming us your just confusing the issue. you're getting paid by those people i realize that the you people are not doing us any good and the country you need to just stop bothering us. and i assure telling the truth is a bother in this case. when i at least talk about the consumer play a role in this collapse i don't mean to keep all of the blame on all the consumers out there certainly there rebels were acting

responsible but the fact the matter is if we have the economy that is made up 7% consumer spending and you see that huge increase of consumer credit was extended by banks and consumers gladly took on the credit and took on the obligation and it went bust for many different reasons papaya or not regardless of whom paid to make the consumer played a role. let's get to some more criticism of must at least some people are sick of us blenny consumers for the collapse. everybody pool has defaulted on a mortgage loan or someone who just over in don't be a bet. i want you to know that i make $47,000 a year i'm single and i bought a one didn't in thousand dollars home which is in default simply because my employers shut down abruptly and took our paycheck

so stop making at it appeared that everybody just took on this but they couldn't afford. at the she has a point in that they're so many victims of this crisis and some in the intended consequences and yes it's very painful that you have a job and you're paying your bills and you try to save it in yes yes you lost your job and this is what happens then is very difficult to make that payment. very tragic and so many cases. tragedy and of course critiques and criticism all welcome comments at first business x. c o m 3126608397. coming up next in chart talk housing data takes pride in center stage in the weeks to work at a closer look at the home building x index. that's in chart talk after this in the message.

well with the stock market at 10 month highs for the s&p 500 is going to be a critical week for housing a lot of housing data and but again the get x h be the home building index ending detailed some of those green shoes that have been developing in housing market in terms of sales over the past three months or so when you take a look at the home builder exchange traded fund x h b you can see it reflected in the price action if the we are seen with a stock x h p at its highest level since the collapse began to gather and store it plows gathered in after all for taking a look at the year to

date sent cambric the performance has been up 0.4% to well above the performance for the s and p 50 hundred so x a to be hovering at around $15 a share is right at the levels since october of 2008. look like some short-term support here developing to around 15 so what the price action we see on the heels of all the housing data coming in in a place that investors are going to be looking for reaction in the front entrance because the source of money involved but also on the home builders themselves if with a new home starts and permits due out. in my mind this exchange traded fund tracks the home builders like tv homes if toll brothers those actual numbers don't come out until later next week but certainly with all the housing data that's coming this week is for sure if want to be moving this index. watching volume as well and home builders. we are one in to hear what interests you of course, the and drama stories on our voice mail at

3126608397 we will see you online at first business x. c o m or back here next time think if watching the body. (mom) i'm not going to be able to see her every day.

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